The criticisms came in the form of a letter to City Manager Michael Uberugga by Lisa Briggs, executive director of the taxpayer association, with the support of two-thirds of the council members. In her letter, Briggs, questioned the audit committee’s ability to oversee independent inquiries. “While on the surface, this appears a good start,” Briggs wrote, the taxpayer association “submits that such actions do not go far enough nor do they insure an unbiased assessment of the current state” of the retirement system, according to a San Diego Union-Tribune report.
Additionally, Briggs said the audits must be “comprehensive in scope” and include assessments of investments, investment management, operations, administration and delivery of benefits. They also must include recommendations to fix deficiencies.
Lawrence Grissom, the system administrator, said it will be, and that he hopes to adopt at least one of Briggs’ suggestions. Further, Grissom said they would shoot to meet additional criteria.
- conducted by independent national firms carrying at least $50 million of professional liability insurance, and that the firms not currently work for the city of San Diego or any of its subdivisions or affiliates.
- conducted by firms that agree in writing that they will be ineligible for city work after the audits are completed. This, too, is under study.
However, Paul Barnett, Grissom’s deputy, disputed assertions that retirement board members should not participate in the process, calling them the best-qualified because of their years of experience in retirement issues. “In fact, we would have a lesser result” if board members were excluded, he said.
Officials with the $2.6-billion San Diego City Employees Retirement System say bids will be put out later this month for firms that will conduct broad inquiries into the pension fund, from its investments to its internal administration. Those firms will be overseen by an audit committee consisting of five members of the 13-member retirement board of trustees.
Like many public and private retirement systems nationwide, San Diego’s city retirement system has been damaged in recent years by investment losses and years of underfunding by the city, a practice dating to the mid-1990s and used by mayors and city councils to balance tight city budgets. Additionally, the fund has been squeezed by demographic forces – retirees are living longer – and by political forces, including the granting in recent years by mayors and councils of generous retirement benefits to city workers, particularly public-safety employees.
It was not until last year that the City Council committed to a payment schedule intended to bring the system to full funding within several years. However, with such an aggressive schedule also comes fiscal pain, such as putting the squeeze on city services as the retirement system’s liabilities eat up an increasingly larger share of the city’s budget.